PETALING JAYA: Homebuyers should do their own research as well as hire a lawyer when buying property to avoid getting implicated in scams, advised Tia & Noordin Advocates and Solicitors partner Chris Tia (pic).
He said prospective purchasers need to do research to at least have general knowledge and not be afraid to ask their lawyers for advice and guidance to understand the process when buying property.
“They must go to reputable sites and agencies to get valid information when buying a property, especially the first timers,” Tia told SunBiz in an interview in conjunction with the PropertyGuru Asia Malaysia Awards for which he is a judge.
He said lawyers who are registered with the Bar Council are able to advise, guide and act as their legal adviser when buying property.
Homebuyers who purchase property legally are also protected by insurers.
“That means if anything goes wrong, you can claim the insurance or sue the lawyer to get compensation,” he explained.
Depending on the complexity of the matter, Malaysian lawyers do not charge for general advice and legal fees for the purchase of a house are calculated based on the percentage of the transaction price of the property, which can be anywhere from 0.5% to 1%, depending on the value of the property.
“In Singapore and Australia, they charge hourly but not in Malaysia. In Malaysia, lawyers’ services are not expensive, and we are quite friendly. And 1% is not a lot,” said Tia.
“Unlike litigation lawyers, you do not have to worry about the fee because it is a scale fee for the services,” he stressed.
Prospective purchasers can check online and refer to the Bar Council for legal services as well as pro bono lawyers for those who cannot afford to pay for services.
As for property agent services, Tia said homebuyers should only deal with authorised legal agents.
Homebuyers can check on real estate negotiators or real estate agents with the Malaysian Institute of Estate Agents.
Tia said that during his years of providing service in the industry, he has handled many types of fraud tactics.
He reminds prospective buyers – if something is too good to be true, it is never true.
“An increasingly common fraud tactic involves subsale or second-hand houses, in which scammers work in a team to fool homebuyers.
“The team will show the purchaser a unit renovated, like a hotel, selling at a good price. But the purchaser will end up with a different, empty unit,” Tia said.
In addition, there is an increasing trend of illegal agents now providing what they call “one-stop service”.
“They falsify some of the documents, and these have very bad repercussions because once you submit the false documents to the bank, these banks will find out and blacklist the purchasers, report to Bank Negara as well as the police. It is really bad, and all this happens without the purchasers’ knowledge,” he said.
The worst part is that these agents cannot be held responsible because they are not registered, so there is no black and white.
“So get to know your agents and lawyers, go to their offices, and avoid using the same lawyer because a lot of times agents want to use only one lawyer. This is where conflict of interest comes in,” Tia said.
First-time homebuyers should know and understand the costs involved in buying property, including stamp duty, registration fees, legal fees and loan document fees. The fees homebuyers need to fork out upfront can amount to quite a lot.
“In the last Budget, there was some incentive given for first-time homebuyers, mainly for property valued RM500,000 and below, where there is a waiver of stamp duty. Homebuyers should find out government incentives given during the period they are looking to make a purchase,” said Tia.
He added that first-time homebuyers are normally confused when it comes to stratified properties or properties in a multi-storey building, meaning that the land belongs to the owners of the property or the developers.
“For these properties, there is always one very huge cost that they miss up ... the perfection of title costs. Two or three years down the road, they still have to pay stamp duty and legal fees and if they have financing, they still have to pay for financing. This is a common aspect first-time homebuyers are not aware of,” Tia said.
